A colleague just reminded me how great Bastiat was: http://www.freedomsnest.com/bastiat.html. It is a shame that politicians are not required to read about "The Broken Window." The site is also linked on the side under THAT WHICH IS SEEN, AND THAT WHICH IS NOT SEEN .
Wealth is created by individuals, not by government or natural disasters. Fraternity members see-sawing for the March of Dimes does nothing to prevent birth defects. The March of Dimes is a worthy charity but twenty year old males can find better ways to create wealth than see-sawing. They could do my laundry. I would pay them $10 which is $10 more than they got from me for see-sawing. Somebody must ask "What is not seen?"
I wonder what Bastiat would think about a public university offering a course in "Regional Economics." The implicit assumption behind Regional Economics is that one region is more important than another. Who decides the important region?
Life and production not death and taxes.
4 comments:
Could you view it in the sense that the people that live there "own" that region? Therefore they are interested in making it as "profitable" or maximizing their utility of that region. Maybe we could argue that if we put money and effort into the southeast and southwest counties in Virginia and increased the productivity of that region by increasing the human capital, maybe we would overall be helping the world in general. Also, I don't care if the most beautiful views in the United States are in Alaska, it is too far from my family, so I would rather be more inefficient and have natural beauty that is of lower quality close to my family than the other option. These are just a few sentences, not my whole arguement and I'm sure you will point out the ways in which I am wrong...I'll be waiting.
A region is not a corporation. A region's government has no entrepreneurial role. Therefore, a region cannot create profit.
The utility maximization argument assumes that there is a known region utility function which trumps any individual's utility function. For example, if the region decided that your house being destroyed and turned into a porn store increased the region's utility, then your house would be replaced by dildos and peep shows. The indvidual surrenders his utility and his property rights to the region's government.
You cannot calculate an aggregate utility function without denying the existence of the individual.
If it was worth it to spend money in rural Virginia, then why haven't private entrepreneurs invested already? They have in other rural areas. Look at Northern Virginia and the Route 29 Corridor. Private enterprise has turned rural Virginia areas into metropolitan areas. Private individuals will optimize profits and/or utility without coercing anyone through taxes and eminent domain.
Private economics does everything more efficiently than regional economics.
I think more the point I am trying to make is that I think people often view the areas they live in as owning them. While they may not be actually creating profit, that isn't how those involved view the situation. If private economies do everything more efficiently, what is the reasoning behind your research? Shouldn't you just wait to see if a private company in the Philippines decideds to do what you are doing or pays you to do it?
The answer to you last question is yes.
I understand people deem their communities as a private corporation, but they should not.
My argument is that a local government acting like a private corporation trumps (probably a minority of) indiviudals. Unless we have unanimous voting with vote trading like in the Buchanan system, a local goverment cannot make decisions without decreasing someone's utility.
There are no public goods. There are plenty of club goods, but a region's government is ill-suited for estabilishing these goods.
Government's role is to enforce Truths, not create profits and utility for some of its citizens while creating losses and disutility for other citizens.
Post a Comment